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REAL ESTATE REPORT - REDI-net.com

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RERC © <strong>REAL</strong> <strong>ESTATE</strong> <strong>REPORT</strong> - THE NATIONAL <strong>REAL</strong> <strong>ESTATE</strong> AUTHORITY<br />

RERC HISTORICAL CAPITALIZATION RATE AND YIELD RATES<br />

RERC Historical Required Pre-tax Yield Rates<br />

Percent<br />

10.5<br />

10.0<br />

9.5<br />

9.0<br />

8.5<br />

8.0<br />

4Q 2006<br />

1Q 2007<br />

Source: RERC, 4Q 2010.<br />

10 WWW.RERC.COM<br />

2Q 2007<br />

3Q 2007<br />

4Q 2007<br />

1Q 2008<br />

2Q 2008<br />

3Q 2008<br />

4Q 2008<br />

1Q 2009<br />

2Q 2009<br />

3Q 2009<br />

4Q 2009<br />

1Q 2010<br />

2Q 2010<br />

3Q 2010<br />

4Q 2010<br />

RERC Historical Required Going-in Capitalization Rates<br />

Percent<br />

9.0<br />

8.5<br />

8.0<br />

7.5<br />

7.0<br />

6.5<br />

6.0<br />

Source: RERC, 4Q 2010.<br />

4Q 2006<br />

1Q 2007<br />

2Q 2007<br />

3Q 2007<br />

4Q 2007<br />

1Q 2008<br />

2Q 2008<br />

3Q 2008<br />

4Q 2008<br />

1Q 2009<br />

2Q 2009<br />

3Q 2009<br />

4Q 2009<br />

1Q 2010<br />

2Q 2010<br />

3Q 2010<br />

4Q 2010<br />

10.5<br />

10.0<br />

9.5<br />

9.0<br />

8.5<br />

8.0<br />

9.0<br />

8.5<br />

8.0<br />

7.5<br />

7.0<br />

6.5<br />

6.0<br />

WINTER 2011 | VOL 39 | NO 4<br />

RERC Historical Spread Between Yield Rates and Cap Rates<br />

Basis Points<br />

185<br />

175<br />

165<br />

155<br />

145<br />

135<br />

125<br />

4Q 2006<br />

1Q 2007<br />

Source: RERC, 4Q 2010.<br />

2Q 2007<br />

3Q 2007<br />

4Q 2007<br />

1Q 2008<br />

2Q 2008<br />

3Q 2008<br />

4Q 2008<br />

1Q 2009<br />

2Q 2009<br />

3Q 2009<br />

4Q 2009<br />

1Q 2010<br />

2Q 2010<br />

3Q 2010<br />

4Q 2010<br />

RERC Historical Spread Between Required Pre-tax Yield<br />

Rates and 10-Year Treasuries<br />

Basis Points<br />

800<br />

700<br />

600<br />

500<br />

400<br />

300<br />

Sources: RERC, Federal Reserve, 4Q 2010.<br />

4Q 2006<br />

1Q 2007<br />

2Q 2007<br />

3Q 2007<br />

4Q 2007<br />

1Q 2008<br />

2Q 2008<br />

3Q 2008<br />

4Q 2008<br />

1Q 2009<br />

2Q 2009<br />

3Q 2009<br />

4Q 2009<br />

1Q 2010<br />

2Q 2010<br />

3Q 2010<br />

4Q 2010<br />

© 2011 <strong>REAL</strong> <strong>ESTATE</strong> RESEARCH CORPORATION. ALL RIGHTS RESERVED.<br />

185<br />

175<br />

165<br />

155<br />

145<br />

135<br />

125<br />

800<br />

700<br />

600<br />

500<br />

400<br />

300

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